Keysight Technologies, Inc. KEYS is scheduled to report first-quarter fiscal 2025 results on Feb. 25, after the closing bell. It pulled off a trailing four-quarter earnings surprise of 6.34%, on average.

Find the latest earnings estimates and surprises on Zacks  Earnings Calendar.

Based in Santa Rosa, CA, the electronic design company is expected to report higher year-over-year revenues, backed by strength in the AI data center market; aerospace, defense and government end markets; and healthy momentum in software and services. Management’s focus on expanding its business through collaborations with established sector players is another positive.

Factors at Play

In the quarter under review, Keysight launched the latest version of its Chiplet PHY Designer 2025 — a cutting-edge solution for enhancing high-speed digital chiplet design for AI and data center applications. This upgraded software brings simulation capabilities for the universal chiplet interconnect express 2.0 standard and adds support for the open computer project bunch of wires standard. With the latest software, engineers can get valuable insights into several critical parameters, such as signal integrity, bit error rate and crosstalk, crucial for identifying potential issues before silicon is manufactured. The addition of such cutting-edge products has significantly improved Keysight’s prospects in several verticals.

The company also unveiled its network visibility partner program — AppFusion. By integrating third-party security, monitoring solutions and cutting-edge technologies from leading cybersecurity companies directly into its network packet brokers, the program aims to provide customers with a unified solution that enhances network and security operations while reducing infrastructure costs. This move is likely to have benefited quarterly earnings by positioning the company as a central player in the integrated network visibility and security market.

In the quarter, Keysight announced that it joined the Intel Foundry Accelerator United States Military, Aerospace and Government Alliance to bolster the U.S. Defense Industrial Base and expand the availability of its advanced tools and technologies. The alliance provided members access to the company’s cutting-edge process technology and a robust ecosystem of industry-leading partners, facilitating faster, more efficient development of secure, next-generation military and aerospace systems.

In the to-be-reported quarter, Keysight entered an agreement to provide its electronic design automation software to six of the eight hubs involved in the U.S. microelectronics commons initiative. By leveraging KEYS’s simulation, measurement and design data management capabilities, the solution enables engineers to seamlessly correlate results across the design, simulation and testing phases, reducing risks and improving overall efficiency. These advancements are expected to generate incremental demand for Keysight’s solutions.

In the fiscal first quarter, KEYS also assisted Samsung Electronics in validating FiRa 2.0 secure test cases on the Exynos Connect U100 chipset using the former’s state-of-the-art Ultra-Wideband (UWB) test solution. By integrating secure test cases, the specification verifies the robustness of UWB devices, ensuring they can withstand physical layer attacks and continue to perform reliably in demanding environments. These initiatives are expected to have positive impacts on Keysight’s quarterly performance. 

Overall Expectations

Our estimate for revenues from the Communications Solutions Group segment is pegged at $867.7 million, suggesting 3.4% year-over-year growth. Revenues from the Electronic Industrial Solutions Group vertical are projected to be $407.8 million. 

For the first quarter of fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $1.28 billion, indicating year-over-year growth from $1.26 billion. The consensus estimate for adjusted earnings per share is pegged at $1.69, suggesting an improvement from the $1.63 per share reported a year ago.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.69. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Keysight Technologies Inc. Price and EPS Surprise

Keysight Technologies Inc. price-eps-surprise | Keysight Technologies Inc. Quote

Zacks Rank: Keysight has a Zacks Rank #2.

Stocks to Consider

Marvell Technology MRVL is set to release quarterly numbers on March 3. It currently has an Earnings ESP of +2.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Backblaze Inc. BLZE is gearing up to release quarterly numbers on Feb. 25. It has an Earnings ESP of +3.03% and a Zacks Rank #2 at present.

FTAI Aviation Ltd. FTAI is set to release quarterly numbers on Feb. 26. It currently has an Earnings ESP of +8.16% and a Zacks Rank #2

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